The Tea Act of 1773 was passed by the Parliament to rescue the East India Company. However, I read somewhere that it would have actually made tea cheaper everywhere in the Empire1. By this argument, the Tea Act of 1773 was actually beneficial for the colonies.

  1. What were the actual impacts of the Tea Act on the price of tea in the colonies?
  2. What did the colonies perceive as the impact of the Tea Act?
  3. If there is a gap between actual impact and perceived impact, why?


The quote is from lecture from a series on History of the United States, and is as follows:

What blew the lid off this uneasy peace was the Tea Act of 1773. Which is odd, because the Tea Act not only did not involve any new taxes, but actually offered Americans a luxury item at bargain prices. The Tea Act in fact didn't even begin in the America, it originated halfway around the world, in India [...]. But Americans, far from being grateful at visions of a cheap cup of tea, Americans were only prepared to put the most sinister of constructions on the Tea Act. Lowering the price of tea, they thought, was a trick, to induce Americans to buy at a bargain and thus lure them into paying that one remaining [inaudible - mostly Townshend] tax -- the tax on tea. And when they did that, that would legitimize Parliament's claim to taxing rights in America.

  • 1
    @MarkC.Wallace Okay, maybe I was too hasty. By all those quoted phrases, I meant to ask if they were economically beneficial for the colonies, but they were misinterpreting the motives because of the stamp act. Read somewhere: in a reputable series of lectures on the history of the US.
    – taninamdar
    Jul 21, 2016 at 11:35
  • @MarkC.Wallace Sorry for being late. I have added the relevant quote and its source. It's sill behind a paywall, so may not be useful. But I hope it's clear that it comes from a legitimate source.
    – taninamdar
    Jul 22, 2016 at 16:08
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    And I have reversed my downvote to an upvote. You can't control the paywall, but you've provided enough information for me to be confident that this is a credible source (not the Journal of Psychodelic Marxism and Anti-Zionism). Thanks!
    – MCW
    Jul 22, 2016 at 17:37

1 Answer 1


The Tea Act did not involve new taxes.It was, however, designed to give the British East India Company (BEIC) a monopoly on tea trade.

Prior to this, Americans drank a lot of untaxed tea from other sources (including smuggling). The monopoly given to the BEIC meant that all tea would now be taxed.

The BEIC was struggling under the burden of taxes it had to pay (and the Americans did not). The new monopoly meant that the BEIC could "pass on" their taxes to the Americans. This was good for the company, good for the "system" as a whole, but bad for Americans who formerly had escaped tea taxes.

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